AE for Payment to Creditors & Discount Received

Q.

When amount is paid to creditors, what will be the impact in accounting equation?

1. Assets - No effect
   Liabilities - Decrease
   Capital - Increase

2. Assets - Decrease
   Liabilities - No effect
   Capital - Decrease

3. No impact

4. Assets - Decrease
   Liabilities -Decrease
   Capital - No effect

Q.

Discount received is a ___ .

1. Asset

2. Expense

3. Liability

4. Revenue

Q. Discount received while payment made to the creditors is for the business entity.

1. gain
2. loss
3. asset
4. liability

Q. When money is paid to the creditors, the value of assets will in the accounting equation.

1. decrease
2. increase
3. not change

Q. Credit purchase, during the year is ascertained by preparing ________.

1. Total creditor's account
2. Total debtor's account
3. Cash account
4. Opening statement of affairs